Some say the USD is toilet paper. It is not so. It is just one among the many "toilet paper" currencies floating around. In general, many of today's fiat currencies (paper money) may be considered as "toilet paper" as they are created "out_of_thin_air" - from nothing.
US public dept 1990 - 2019 from 3.2 trillion to 22.7 trillion; present current account deficit is about 500 billion per year. The US amount of 22.7 trillion is fully owed to the rest of the world and not backed by any foreign exchange reserves. China's national debt is about 2 trillion but its US dollar reserves is about 3 trillion; so China is a creditor nation.
It is because of the "unbacked" national debt of the US that many - for many decades now - have claimed the US dollar is just toilet paper; that the US dollar and the US economy would crash. But is it true?
SGDUSD starts crashing from Jan 19 2020, 0.7422 to 23 Mar, 0.684; current 0.7000. 17 Jan is the STI market peak. What happens in a world stock market rout is that global institutional investors divesting their stocks would pull back the money - usually to the US. This is the reason why the USD spike when the global stock market tank. This is the reason why the MAS needed to activate their swap facility with the US FED for immediate USD in order to defend the SGD.
There have been predictions for decades since the Nixon era - when America decided to break the promise to tie the USD to gold - that the USD and the US economy would collapse. Nothing of that sort happened. From then on all currencies of the world became true paper money. But the USD is still the king.
The USD as reserve currency :
In the foreseeable future, the USD will still be king as it has been fine tuned for decades after WWII as the international currency of choice in international trade. When Vietnam export rice to Singapore, we open an LC in USD, not the Vietnamese Dong. The world's banking network is used to the USD and currently, there is no substitute. So in international trade that don't even involve the US, the USD is still needed.
One of the pillar of the USD is the petrol dollar. The US will not allow OPEC and any other oil producers to sell oil in any other currency. Saddam Hussein wanted to go EURO and was taken down. Muamar Gaddafi wanted gold for oil and was murdered. Because the oil trade is a large part of international trade, the oil trade done in USD will ensure the USD will be around for the foreseeable future. Saudi Arabia cannot survive without the US protection and so oil will still be traded in USD as long as the House of Saud remains in power.
The only possible future challenge to the USD is a gold-backed currency, but it is not possible under the present geopolitical scenario.
Chan Rasjid.
Singapore.
"Chemical Analysis Of Plain Distilled Water May Refute Mass-Energy Conservation Of E=mc²"
"The Relativistic Mechanics of E=mc² Fails"; E=mc² is wrong.
"Is Mass Spectrometry Accurate"; Penning trap cannot measure atomic mass.
"Coulomb Electric Gravity"; gravity is all Coulomb electric.
http://www.emc2fails.com
US public dept 1990 - 2019 from 3.2 trillion to 22.7 trillion; present current account deficit is about 500 billion per year. The US amount of 22.7 trillion is fully owed to the rest of the world and not backed by any foreign exchange reserves. China's national debt is about 2 trillion but its US dollar reserves is about 3 trillion; so China is a creditor nation.
It is because of the "unbacked" national debt of the US that many - for many decades now - have claimed the US dollar is just toilet paper; that the US dollar and the US economy would crash. But is it true?
SGDUSD starts crashing from Jan 19 2020, 0.7422 to 23 Mar, 0.684; current 0.7000. 17 Jan is the STI market peak. What happens in a world stock market rout is that global institutional investors divesting their stocks would pull back the money - usually to the US. This is the reason why the USD spike when the global stock market tank. This is the reason why the MAS needed to activate their swap facility with the US FED for immediate USD in order to defend the SGD.
There have been predictions for decades since the Nixon era - when America decided to break the promise to tie the USD to gold - that the USD and the US economy would collapse. Nothing of that sort happened. From then on all currencies of the world became true paper money. But the USD is still the king.
The USD as reserve currency :
In the foreseeable future, the USD will still be king as it has been fine tuned for decades after WWII as the international currency of choice in international trade. When Vietnam export rice to Singapore, we open an LC in USD, not the Vietnamese Dong. The world's banking network is used to the USD and currently, there is no substitute. So in international trade that don't even involve the US, the USD is still needed.
One of the pillar of the USD is the petrol dollar. The US will not allow OPEC and any other oil producers to sell oil in any other currency. Saddam Hussein wanted to go EURO and was taken down. Muamar Gaddafi wanted gold for oil and was murdered. Because the oil trade is a large part of international trade, the oil trade done in USD will ensure the USD will be around for the foreseeable future. Saudi Arabia cannot survive without the US protection and so oil will still be traded in USD as long as the House of Saud remains in power.
The only possible future challenge to the USD is a gold-backed currency, but it is not possible under the present geopolitical scenario.
Chan Rasjid.
Singapore.
"Chemical Analysis Of Plain Distilled Water May Refute Mass-Energy Conservation Of E=mc²"
"The Relativistic Mechanics of E=mc² Fails"; E=mc² is wrong.
"Is Mass Spectrometry Accurate"; Penning trap cannot measure atomic mass.
"Coulomb Electric Gravity"; gravity is all Coulomb electric.
http://www.emc2fails.com
